S&P 500; US Indexes Fundamental Daily Forecast – Light Volume Dampening Rally, but Low Rates Helping NASDAQ

U.S. stock index futures are expected to open the cash market higher based on the price action in the pre-market session. Once again the NASDAQ Composite and -100 Indexes are expected to be the leaders with the blue chip Dow and benchmark S&P 500 Index struggling a little to keep up due to poorly performing sectors and uncertainty over earnings.

The call for lower interest rates is helping to boost the highly capitalized tech stock index while hurting banking stocks which is part of the Dow average and the S&P 500 Index. Traders are also concerned over the direction of crude oil prices ahead of today’s U.S. Energy Information Administration report. The crude oil sector is a major component of the S&P 500 Index.

Health care stocks have also been a drag on the Dow and S&P 500. It looks as if the Republicans have scraped their plans to dismantle Obamacare and issue their own plan.

In earnings news before the bell today, Morgan Stanley and M&T Bank topped Wall Street expectations. After the close, investors will get a chance to react to the latest earnings results from American Express, Qualcomm and T-Mobile U.S.

In other news, both U.S. Building Permits and Housing Starts came in better-than-expected. Building permits showed 1.25 million units were added in June. Housing starts also beat their estimate with a 1.22 million unit boost.

In addition to the 8.3 percent jump in housing starts to its highest level since February, mortgage applications rose 6.3 percent.

Forecast

Last week’s strong surge in the equity markets likely means that investors are betting that interest rates will remain lower for longer-than expected. This news should continue to underpin the markets, however, investors look a little tentative about chasing prices higher at current historical price levels and with lingering issues like the Trump’s problems with the Russians, and the Trump’s inability to get his agenda passed including health care and tax reform.

Once the lingering issues clear up, it should be smooth sailing with the low-interest rate environment fueling the rally.